The Trump administration’s decision in January to give states the power to impose work requirements on Medicaid enrollees faces a federal court hearing Friday.
The lawsuit before the U.S. District Court in Washington, D.C., will determine whether tens of thousands of low-income adults in Kentucky will have to find jobs or volunteer in order to retain their health coverage.
But the ruling could have far-reaching implications affecting millions of enrollees nationwide and determining how far the Trump administration can go in changing Medicaid without congressional action.
Kentucky was the first of four states, so far, to win federal approval to advance a work requirement. Indiana, Arkansas and New Hampshire are the others. Each is now in the early stages of implementation.
Arkansas, for instance, in June began having Medicaid enrollees inform the state about their work status. In September, the state could begin disenrolling members who fail to report or meet the work rules.
Seven more states — Arizona, Kansas, Maine, Mississippi, Ohio, Utah and Wisconsin — have applications pending and several others are poised to join them.
Kentucky’s legal challenge encapsulates a debate about two competing views of the role of Medicaid, the nation’s largest health program that covers nearly 75 million low-income Americans.
The Trump administration and many conservatives see it as a welfare program that should provide only temporary help and should prepare enrollees to gain employment and negotiate private health insurance.
Democrats, advocates for the poor and most legal experts see Medicaid as a health program meant to help the nation’s poorest citizens access health coverage. They say the administration’s approach of requiring enrollees to work to get health coverage is backward because enrollees need health coverage so they are healthy enough to work.
“There is zero evidence to suggest that depriving people of Medicaid will lead to greater levels of employer insurance,” 40 health policy scholars wrote in an amicus brief supporting the lawsuit filed on behalf of several Kentucky Medicaid enrollees.
“The CMS work ‘demonstration’ destroys, not improves, Kentucky’s substantial health care achievements and defeats, rather than promotes, Medicaid’s purpose as a safety net insurer,” according to the brief.
The 2010 Affordable Care Act spurred 33 states to expand Medicaid to nondisabled adults without children. Before that, the program mainly served children, pregnant women and people with disabilities.
That expansion, which provided billions in new federal funding to states, triggered an unprecedented drop in uninsured rates nationwide and tempted some Republican governors to pursue the additional health care dollars. But some of these GOP-controlled states also sought to add the new work requirement, in part to show conservative voters they weren’t simply providing a government handout to poor adults.
States that didn’t expand Medicaid and have some of the strictest eligibility limits in the country —including Kansas and Mississippi — also applied for work requirement waivers.
Here are five things to know as this court case unfolds:
1. Why do the Trump administration and states want to add the new work requirement?
Top Trump officials say the work requirement is meant to help enrollees find jobs. They say people who work or do volunteer service are healthier. Seema Verma, administrator of the U.S. Centers for Medicare & Medicaid Services, said Medicaid should be a “hand up” not a handout.
According to CMS, while the work requirement is a change in policy, it still fits within the agency’s long-standing missions of promoting health and improving health outcomes.
2. How does the work requirement work?
Those who are exempt include children and former foster care kids; pregnant women; seniors; people who are the primary caretakers for a child or a disabled adult; those who are deemed medically frail or diagnosed with an acute medical condition that would prevent them from working; and full-time students.
Adults in northern Kentucky would have to begin registering their work hours this summer, and the rest of the state would follow by the end of 2018.
State officials acknowledge the new requirement could be complicated for many enrollees. “We need to be careful and thoughtful how we roll out the ‘community engagement,’ recognizing this is a huge change,” said Kristi Putnam, deputy secretary for Kentucky’s Cabinet for Health and Family Services.
States have set up different rules on how many hours a month Medicaid enrollees must work or volunteer and who is exempt.
In Arkansas, everyone enrolled in Medicaid has to document their work hours through an online portal created by the state — with no option to submit information in person, over the phone or by mail. Critics of the work requirement fear that will be a barrier, considering the state has the second-lowest rate of home internet access in the nation.
3. What are the main objections to the work requirement from a legal and practical standpoint?
Critics say the requirement would lead many low-income people to lose their health coverage and, therefore, hinder their ability to get medical care. They note Kentucky’s own projections show that 95,000 Medicaid enrollees would lose coverage within five years.
The work-requirement approvals were based on the Health and Human Services secretary’s authority to test new ways of providing Medicaid coverage. The critics also argue, though, that the Trump administration is overstepping its statutory boundaries because the requirement would reduce eligibility rather than expand it.
Lastly, work requirement opponents note most people on Medicaid already work — or go to school, have a disability or care for relatives.
A June 12 Kaiser Family Foundation study concluded that only 6 percent of able-bodied adults on Medicaid who are targeted by states’ work requirements are not already working and unlikely to qualify for an exemption. In addition, 6 in 10 nondisabled adults on Medicaid work at least part time, although they often aren’t offered health benefits through those jobs or can’t afford them. (Kaiser Health News is an editorially independent program of the foundation.)
Surveys show that many Medicaid enrollees who don’t work are in job training, go to school or are taking care of a child or an elderly relative, conditions that would make them exempt from the new mandate.
4. When is the court expected to rule, and could this issue go to the Supreme Court?
Both sides expect a quick decision, likely by late June. But an appeal is likely no matter who wins.
If the Trump administration wins, it’s uncertain if plaintiffs will be able to get a stay on the work requirement taking effect while an appeal is in process.
5. While the work requirement is getting most of the attention, what else is at stake in the court case Friday?
The lawsuit filed by advocates on behalf of Medicaid enrollees seeks to overturn the entire Kentucky Medicaid waiver approved by the Trump administration in January.
Kentucky’s waiver also sets precedent because it would become the first state to charge Medicaid premiums of up to 4 percent of an individual’s income. The current limit has been 2 percent. Moreover, Kentucky would become the first state to lock out Medicaid enrollees from coverage for up to six months for failure to timely renew their coverage or failure to alert the state if their income or family circumstances have changed.